Jailbreak Innovation

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Présentation de Philippe Méda (MERKAPT) pour Le CAMPING à Paris, le 27 septembre.

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Jailbreak Innovation

  1. 1. introriskbattlefield INNOVATION JAILBREAKINGlean bmsmall steps Le CAMPING / MERKAPT Philippe MÉDA, 27 dec. 2011 1
  2. 2. introriskbattlefieldlean bmsmall steps «... We think that it would be relevant and helpful to have our new teams interact with you on the topics of Goal Setting, Bootstrapping, and Innovation.» 2
  3. 3. introriskbattlefield Philippe Médalean bmsmall steps Biotech Researcher PhD Pharma BU Director MBA Entrepreneur  Business Model Designer  3
  4. 4. introriskbattlefield Philippe Médalean bmsmall steps startups { copilotage de l’innovation { 4
  5. 5. introriskbattlefield OK, how tolean bmsmall steps make this work? ➊ Cope with innovation (risk) ➋ Find your battle field (added value) ➌ Challenge your business model (go lean) ➍ Plan for boostrapping (finance stepping stones) 6
  6. 6. introriskbattlefield Innoriskvationlean bmsmall steps FAIL SUX LOL EPIC FAIL WTF OMG 7
  7. 7. introriskbattlefield Innoriskvationlean bmsmall steps Technology Will it None work? gets it! Will We are someone safe... pay for it? Market 11
  8. 8. introriskbattlefieldlean bm g macaques groups,small steps « Amon the last to ad opt an innovation » are alpha males... ue Moléculaire Evolutive et Médicale, U571 INSERM) de Génétiq atoire François TADDEI (Labor 12
  9. 9. introriskbattlefield The dreamlean bmsmall steps of incremental innovation Sales V4 V3 Fixed Costs V2 V1 13
  10. 10. introriskbattlefield Is for business schools...lean bmsmall steps 14
  11. 11. introriskbattlefield Predictionslean bmsmall steps There is little reason for an individual to have a computer in their home. Ken OLSEN, CEO Digital Equipment, 1977 15
  12. 12. introriskbattlefield Predictionslean bmsmall steps 16
  13. 13. introriskbattlefield Predictions Accelerationlean bmsmall steps 17
  14. 14. introriskbattlefield Tectonic shiftslean bmsmall steps 18
  15. 15. introriskbattlefield Tectonic shiftslean bmsmall steps 19
  16. 16. introriskbattlefield Innovationlean bmsmall steps Innovation by the entrepreneur, leads to gales of “creative destruction” as innovations cause old inventories, ideas, technologies, skills, and equipment to become obsolete. The question is not “how capitalism administers existing structures, ... [but] how it creates and destroys them.” . Joseph SCHUMPETER, 1883-1950 20
  17. 17. introriskbattlefield The (startup) confort zonelean bmsmall steps Technology  Market Business Model Finance Innovation 21
  18. 18. introriskbattlefield Inventionlean bmsmall steps ENHANCE PRODUCTS LOWER PRICES TECHNOLOGY PATENTS SPECIFICATIONS REVENUES 22
  19. 19. introriskbattlefield Innovationlean bmsmall steps CHANGE THE MARKET ADDED BUSINESS ( TECHNOLOGY) REVENUES VALUE MODEL you may need it 23
  20. 20. introriskbattlefield Innovationlean bmsmall steps Invention means the creation of a novelty. When innovation is define by the introduction of an invention in the social environment. The market is a specific form of social organization. Joseph SCHUMPETER, 1883-1950 24
  21. 21. introriskbattlefield Added Valuelean bmsmall steps What you What they Who they build actually are come to get ADDED PRODUCTS CUSTOMERS VALUE 25
  22. 22. introriskbattlefield Your challengeslean bmsmall steps Business Model ➌ Innovation GO ! ➊ ➋ EARLY MARKET CHASM CORE MARKET Added Business Profits and Scaling? Value? Model? Market Shares? 26
  23. 23. introriskbattlefield Destroy somethinglean bmsmall steps EARLY MARKET 27
  24. 24. introriskbattlefield Prepare D-Daylean bmsmall steps CHASM 28
  25. 25. introriskbattlefield Congratulations,lean bmsmall steps you are a dinausor too! CORE MARKET 29
  26. 26. introriskbattlefield But first...lean bmsmall steps ➌ GO ! ➊ ➋ EARLY MARKET CHASM CORE MARKET Added Business Profits and Scaling? Value? Model? Market Shares? 30
  27. 27. introriskbattlefield Technology failslean bmsmall steps Who invented orthographic and grammatical auto-correction, with embedded dictionnary, for word-processing, in 1989? 31
  28. 28. introriskbattlefield Technology failslean bmsmall steps (hint) 32
  29. 29. introriskbattlefield Technology failslean bmsmall steps 33
  30. 30. introriskbattlefield Technology failslean bmsmall steps 34
  31. 31. introriskbattlefield Technology failslean bmsmall steps 35
  32. 32. introriskbattlefield Technology failslean bmsmall steps 36
  33. 33. introriskbattlefield Define your battlefieldlean bmsmall steps ADDED VALUE { 37
  34. 34. introriskbattlefield Define your battlefieldlean bmsmall steps Segment A Segment B Segment C ➊➋➌➍➎ ➊➋➌➍➎ ➊➋➌➍➎ 38
  35. 35. introriskbattlefield Define your battlefieldlean bmsmall steps 39
  36. 36. introriskbattlefield Define your battlefieldlean bmsmall steps This is not a phone... 40
  37. 37. introriskbattlefield Competition?lean bmsmall steps 41
  38. 38. introriskbattlefield Direct competition!lean bmsmall steps 42
  39. 39. introriskbattlefield We don’t carelean bmsmall steps about your product 43
  40. 40. introriskbattlefield Business modellean bmsmall steps BUSINESS MODEL Your strategy to generate added value for your customers, and how to transform this into sustainable revenues streams. BUSINESS PLAN Your step-by-step operational forecast of how this logic will happen in real life, during the next 5 years. 44
  41. 41. introriskbattlefield 3 Strategylean bmsmall steps Problem and Only the Nothing is Solution are problem is KNOWN KNOW KNOW CASCADE AGILE LEAN 1. SPECS 1. MODEL the PB. 1. FIND A PB. 2. DEV 2. DEV PROTOTYPE 2. FIND SOLUTIONS 3. TESTS 3. TESTS 3. TEST & PIVOT 4. SALES 4. OK : SALES 4. REFINE & SALES OK : ITRERATE ? ? ? 45
  42. 42. introriskbattlefield Lean is sexylean bmsmall steps Eliminate waste Fail early Pivot / Iterate fast Get to actually know customers! 46
  43. 43. introriskbattlefield VCs like leanlean bmsmall steps What you do: What they think: Eliminate waste We spend only what is needed Fail early We won’t burn too much cash Pivot / Iterate fast They could be actually trying to sell Get to actually know the customers Worst case scenario: solid in$ights 47
  44. 44. introriskbattlefield Lean = Cut the fatlean bmsmall steps 48
  45. 45. introriskbattlefield MVP is sexylean bmsmall steps Minimum Don’t fall Viable in love Product with your ideas 49
  46. 46. introriskbattlefield MVP <> Spec pornlean bmsmall steps 50
  47. 47. introriskbattlefield Kill features!lean bmsmall steps 51
  48. 48. introriskbattlefield Kill features!lean bmsmall steps 1986: $50-200 M 52
  49. 49. introriskbattlefield Kill features!lean bmsmall steps 2011: $4.5 M 53
  50. 50. introriskbattlefield Strive for the perfect matchlean bmsmall steps Mediocrity True love 54
  51. 51. introriskbattlefield Word of cautionlean bmsmall steps (There’s no method) 55
  52. 52. introriskbattlefield Business modellean bmsmall steps 56
  53. 53. introriskbattlefield Business modellean bmsmall steps Structure Offer Market core strategic added value products monetization communication distribution customers competencies partners Explain your strategy 57
  54. 54. introriskbattlefield Business modellean bmsmall steps 58
  55. 55. introriskbattlefield Lean business designlean bmsmall steps Structure Offer Market core strategic added value products monetization communication distribution customers competencies partners Vision (take risks) Design Rapid Whoever prototyping can provide Unique Minimum Day 1 Customer insights on Early vision of a viable revenue Direct customer contact engagement the market, adopters problem product generation or help Low move faster resources mgmt. Metrics (pass milestones) 60
  56. 56. introriskbattlefield Lean business designlean bmsmall steps Structure Offer Market core strategic added value products monetization communication distribution customers competencies partners 1 1 1 1 1 1 1 1 2 1 2 2 2 2 1 1 3 3 3 3 2 3 1 1 3 4 4 4 2 4 2 2 4 5 5 5 3 5 2 2 4 6 6 5 6 6 2 2 80% 80% 80% 80% 80% 80% 80% 80% 66
  57. 57. introriskbattlefield A good worst case scenariolean bmsmall steps 67
  58. 58. introriskbattlefieldlean bmsmall steps Startups die from lack of customers. Not from uncomplete products. (OK, except biotechs) 68
  59. 59. introriskbattlefield So get out!lean bmsmall steps (Not right now, thanks) 69
  60. 60. introriskbattlefield About metrics...lean bmsmall steps 70
  61. 61. introriskbattlefield About metrics...lean bmsmall steps Top-down: Bottom-up: «If we get 1% of the «With 300K more, worldwide mobile this is what we can security network...» do...» 71
  62. 62. introriskbattlefield Small steps scenariolean bmsmall steps Cash-flow Create small, reachable prizes... Market penetration Market size $XM Market Break even seeding First Mature customer Early Prototype Public release BoostrappedValuation ➜ prototype Market rollout Business model Sales dev. Added value Staffing Incubation Market problem Technology $XK Sales CTO / CEO team R&D funding Early revenues 3 EmployeesTime ➜ 72
  63. 63. introriskbattlefield We are not all born equal...lean bmsmall steps 73
  64. 64. introriskbattlefield We are not all born equal...lean bmsmall steps Retail IT / web Biotechs 74
  65. 65. intro risk battlefield Foresee possible forks lean bm small steps License the VC Exit With alternate, technology Market size $XM less-reachable prizes... Accelerated Earlier break market even penetration Market Industrial penetration partners Market size $XM Market Break evenValuation (less dilution) ➜ +600K seeding First Mature customer Early Prototype Public release Boostrapped Market rollout prototype Business model Sales dev. Added value Staffing Incubation Market problem Technology $XK Sales CTO / CEO team R&D funding Early revenues 3 Employees Time (less risk) ➜ 75
  66. 66. introriskbattlefield Ask only what you needlean bmsmall steps 76
  67. 67. introriskbattlefield Get your metrics rightlean bmsmall steps Acquisition people come interested from different channels. Activation they interact and are satisfied by the experience. Retention they come back for more, several times. Revenue they actually buy something (yeah). Referral they take the extra-pain to promote you. 77
  68. 68. introriskbattlefield Get your metrics rightlean bmsmall steps Dave «AARRR» McClure / 500hats.com 78
  69. 69. introriskbattlefield Freemiumlean bmsmall steps Red Pill Blue Pill Increase Increase conversion rate freeloaders’ base Acquisition costs Source of traffic (ad networks, publishers) Cost model (CPM, CPC, CPA) User requirements (install, browser plug-in, Flash) Audience Theme Funnel design (landing page, length, fields) WTM (Facebook, Twitter, email, IRL) A/B testing process 79
  70. 70. introriskbattlefield In a nutshell...lean bmsmall steps 1.Define your battlefield, challenge your added value with customers. 2.Iterate and remove features. 3.Refine your business model to sustain your added value with customers. 4.Build a small-steps scenario ASAP, including possible forks. 5.Set up metrics and control precisely the advance of the scenario 6.Understand where/when a VC can positively interact with you. 7.Finance only what you need to get to the next step. 80
  71. 71. introriskbattlefield One last thing...lean bmsmall steps CEO think long term and get the big picture (what can we trim down to get to the core / what is the battlefield?) CFO think short term and help moves forward (how to finance the milestones / do they bring enough value?) CTO think both short and long term (is what they both ask, realistic / can someone else do it faster, cheaper?) 81
  72. 72. introriskbattlefieldlean bmsmall steps MERCI ! Philippe MÉDA pmeda@merkapt.com @PMerkapt 82

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